Novo Nordisk underestimated the impact of competition from personalized compounded drugs when providing sales estimates for its GLP-1 diabetes and obesity drugs Ozempic and Wegovy, according to an investor lawsuit.
Novo is accused of making "false and misleading statements" to downplay the competition from compounders, says the lawsuit, which was filed Friday, three days after the company introduced a new CEO and slashed its projection for 2025 revenue, sending its share price into a 22% tailspin.
Novo cut its 2025 sales growth estimate from a window of 13% to 21% to a new range of 8% to 14%. The company also reduced the midpoint of its operating profit growth projection from 20% to 13%. The company issued its previous guidance when it released its first-quarter financial figures May 7.
The lawsuit, which was filed in U.S. District Court in New Jersey by a single investor, Eric Barta, is a class action on behalf of those who purchased Novo shares between May 7 and July 28. Barta is attempting to “recover losses sustained in connection with defendant’s fraud,” the lawsuit reads.
“We are aware of the complaint and disagree with the allegations,” a Novo spokesperson said. “We cannot comment further as this is pending litigation; however, we will defend against these claims.”
Last week, Novo blamed “the persistent use of compounded GLP-1s, slower-than-expected market expansion and competition,” for the reduction in its sales estimates.
Novo explained that it expected a boost in sales of its semaglutide products, which include weight loss med Wegovy and Type 2 diabetes drug Ozempic, when the FDA grace period for allowing compounders to sell their cheaper versions of its drugs ended May 22. But the compounders have continued to manufacture and sell them “under the false guise of personalization,” Novo said.
The Danish drugmaker did not reveal recent sales figures for Ozempic and Wegovy last week. That will come Wednesday when the company presents its second-quarter earnings.
In May, Novo reported first-quarter Wegovy sales at 17.36 billion Danish kroner ($2.64 billion), which was a 13% sequential decline from the fourth quarter of 2024. Sales of Ozempic also fell sequentially by 3% to 32.72 Danish kroner ($5.06 billion).
Sales of Novo’s semaglutide products have been impacted by competition from Eli Lilly’s tirzepatide drugs, Zepbound and Mounjaro, which have continued to scale upward. In the first quarter, Lilly reported sales of obesity treatment Zepbound at $2.31 billion, which was a 21% sequential increase from the fourth quarter of last year, while diabetes medicine Mounjaro was up 9% sequentially to $3.84 billion. Lilly will report its second-quarter sales Thursday.